RBC rates Ceragon “Outperform"
RBC predicts 27% revenue growth for Ceragon in 2007.
Shiri Habib 15 Apr 07 17:14
RBC Capital Markets has initiated coverage of Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT) with an “Outperform speculative risk” recommendation at a target price of $8 per share, 34% above its market price.
RBC analyst Daniel Meron says, “Booming data usage and user base growth is driving a technology shift towards high capacity solutions. We believe Ceragon is well positioned to benefit from the rising demand for its high-end solutions. We project that market growth and successful channels strategy will continue fueling the company's top line and trickle to operating margin expansion. We believe Ceragon shares will edge higher on continued execution that will propel multiple expansion towards peer valuation.
“Rising need for communications backhaul: telecom service providers in developed regions experience rapid increase in data usage from 3G applications and emerging wireless broadband networks (WiMax, WiFi). In developing markets, service providers see strong subscriber growth and look to expand coverage footprint.
“Ceragon successfully carved a niche in the high-end segment with strong technology edge and good execution on channels strategy. We believe that the Nokia-Siemens joint-venture will not dampen the relationship as Ceragon has a clear technology lead and this OEM relationship will continue to fuel growth. While competition is fierce, we believe Ceragon can defend and incrementally expand its market share.”
RBC predicts 27% revenue growth for Ceragon in 2007 to $137 million, and boost earnings per share (EPS) by 64% to $0.39. RBC further predicts EPS of $0.54 on $166 million revenue in 2008.
Published by Globes [online], Israel business news - www.globes.co.il - on April 15, 2007
